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Getting Help with Investment Property Depreciation

Quantity surveyors play a crucial role while dealing with investment property depreciation schedule. Many people may find it confusing when they have to deal with something that includes the term depreciation. They assume that depreciation means a decline in value so they link it to something very negative. But, when it comes to an investment property, depreciation will actually be in your favour as long as you tread the path cautiously. So, let’s just say, you have an old property in your possession and you are exploring ways to make optimum use of it. In such a scenario, you may either repair or renovate the old property or just resell it. Here you must know that renovating your old property can yield you great benefit as a result of tax building depreciation.

Here are some important factors:

1) Many people sell their used property and remain unaware that they can apply for property tax depreciation against taxable income. The tax claim can be made in two ways. First one is plant and equipment. It covers taxable objects used inside the property. These objects may include air conditioner, laundry machine or any other machinery. However, deductions for the plant and equipment items will be applicable if you purchased the property before May 9, 2017. Tax claims can be made through building allowance. It covers all the construction expenditure for those properties constructed before 1985.

2) In order to apply for tax entitlements, you must hire a quantity surveyor who will carry out all the work for you. The work of a quantity surveyor mainly includes organising the depreciation schedule which can validate the tax deductions. The expert quantity surveyor will prepare the property tax depreciation schedule. As you cannot avoid payment of repairs and renovations on an old property, you can get most of the cost back by paying less tax.

3) A quantity surveyor will help you in evaluating your property and prepare a depreciation report. The report will be presented at the tax office for reference. The expert quantity surveyor will make a big difference in how big or small tax benefit you will receive. If the surveyor prepares a comprehensive report covering all minute details, you may receive a great tax benefit. The expert quantity surveyor can effectively organise a depreciation schedule for investment property.

4) The quantity surveyor will carry out a physical inspection of the property. It will allow him to record all of the legal entitlements in the report. They ensure that the tax depreciation report includes all depreciable assets so that they cost it accurately.

Conclusion:

So, it is important to hire an expert quantity surveyor who has the right legal information and technical expertise. All Quantity Surveyors should follow the tax laws and other ATO guidelines. You can then work with the surveyor on the depreciation schedule and report. The expert surveyors will assess the depreciation rates for all of the assets. It will help them determine if you are permitted to a write-off rate. So hire the best quantity surveyor who can estimate tax returns for you from Deppro, Australia.

What You Should Know about Property Depreciation

Most of us begin our real estate affairs without any knowledge of property depreciation. However, knowledge about the term may prove advantageous in the long run, particularly if you have owned a property for a long period of time. In short, investment property depreciation can decrease taxes that you may have to pay as tax time arrives. You can also claim depreciation tax on various other things as well which may include the vehicle that you have been using for generating income. Similarly, you can also seek benefit from real estate property tax depreciation. Your sound knowledge on depreciation for tax purposes will prove beneficial for you.

Here are some important things you should know about property depreciation:

1. Is your property too old for claiming depreciation?

If your residential property was constructed after July 1985, you can still claim building allowance as well as plant and equipment. However, if construction began before the aforementioned date, you will only be able to claim depreciation on plant and equipment.

2. Should your accountant prepare this report?

In case your residential property was constructed after 1985, your accountant will not be allowed to assess construction costs. Neither the real estate agents nor the solicitors can estimate the construction cost. You should be aware of the important details of the tax depreciation report and tax ruling 97/25 issued by ATO.

3. How can you claim depreciation for your property?

It is essential to obtain a property depreciation report. A qualified quantity surveyor will help you secure that report. The surveyor is an expert in estimating the cost of any property. They are qualified enough to prepare a depreciation report even if construction costs are not known.

4. Will you require scrutinizing your property?

It is essential to obtain site inspections which satisfy ATO requirements. The expert quantity surveyor will make sure that all of the depreciable objects are calculated along with their images. It will ensure that you do not skip any deductions. In the scenario of an audit, the documentation will prove useful and can be used as evidence. Quantity surveyors communicate directly with the property manager or tenant so that least interruption is caused to the tenant. They have expertise in preparing tax depreciation schedules and other essential reports to keep you at ease.

5. Will you be able to claim depreciation if the property is renovated?

Yes, however, you must know exactly how much you spent on renovations. In case the earlier owner carried out the renovations, you can still claim depreciation. If the cost of renovation is not known, the expert quantity surveyor will make the estimate.

Final Thoughts:

You can find some of the best-qualified quantity surveyors in Australia at Deppro. They will offer their services at cost effective prices and will not create a hole in your pocket. You can also find a Deppro contact number online. Get in Touch with the depreciation specialists today.

4 Facts every Property Investor Needs to know about Claiming Depreciation on their Rental Property

When it comes to depreciation schedules for your rental property, it is quite important to know all the necessary facts included within the same. Given below are four important facts to understand tax depreciation:

Fact 1: Depreciation is known to be the largest set of deduction, which is available for any property investor

To start off with the first fact, it is really important to know that tax depreciation is known as one of the largest set of deductions. Depreciation lies within the range of $2,500 – $5,000 for the existing house whereas the brand new one averages around $10,000 – $13,000 per unit. It is typically done for the first complete year for standardised residential houses or properties.

Let’s Take an Example to Understand Deppro Tax Depreciation

John, a senior officer of the IT department happens to purchase a unit in his city to make his first investment. That very unit was built around 10 years ago, as a matter of fact John bought it for around $540,000 in the month of April 2017. The yearly income of John is $75,000.

Every year John’s unit goes through the aging process, along with all the other common areas that go in the unit development. As John bought and rented his very property before the 9th of May, 2017, he can raise a claim for the act of depreciation of his building. In addition to that, he can also raise a claim of Deppro tax depreciation for the entire assets included, as a matter of tax deduction.

Fact 2: New properties happen to generate better depreciation deductions for all the investors

When investors purchase brand new properties for investment purposes, it ends up generating greater depreciation deductions. It can be the very case for two vital reasons:

When it comes to constructing today’s properties, it costs an individual more than it was back in the day. A very important way to calculate depreciation is by calculating a mere percentage of the whole construction cost that will be deducted each year. When all the equipment and plant assets are new, it initially ensures that they are eligible enough for the annual depreciation deductions.

Fact 3: It is been said that 90% of properties that are old qualify for deductions in the shape of depreciation

It is quite vital to understand that new properties happen to generate one of the best depreciation deductions, which many of the investors fail to realise. To understand it in a much easier way is when a property is built 40 years ago, it is understood that there will not be any value left in order to depreciate and later claim.

If one specific property was bought before the 9th of May 2017, the assets that come within that very property will also qualify or be eligible for depreciation deductions.

Fact 4: Benefits of tax depreciation, when claimed, outweigh the impact made on CGT

Some of the investors are only concerned about the claiming of depreciation now, and on the contrary think that they are only increasing their Capital Gains Tax, which will be made payable if they happen to sell off their property.

Having said in the tax depreciation report, that only the depreciation, which is claimed for Buildings and Structures are deducted from the cost of your base. The Deppro tax depreciation cannot be claimed on Division 40 – assets such as stove, hot water system, blinds, and air conditioner.

Properties rented or bought after 7.30pm in the month of May 2017 do not make annual claims for the act tax depreciation report of depreciation on Division 40 assets present in their property. However, when the property gets sold out, the value accumulated on that depreciation is claimable as the expense, which further goes on to reduce profit on its sale as well as the potential payable CGT.

Know the Status of Depreciation Deductions on your Property

Mentioned above are some of the most important facts that investors need to keep in mind before claiming depreciation on their rental property. An easy way to do so would be to use Deppro tax depreciation for further assistance.

Depreciation on investment property makes life easier

Investors and business owners order depreciation on investment property so they can efficiently handle expenses. Many investors, though, don’t know about depreciation and how it can make their lives easier. It absolutely pays off financially, and there’s other perks as well.

Most people don’t think about taxes everyday, but the professionals do. Ordering a depreciation report on investment property removes a lot of guesswork and takes the pressure off their minds. Thanks to the experts, they can make accurate deductions for the time they own the properties in their portfolios. Deppro’s reports last forty years, long enough to hold the property and sell it on.

Access to a depreciation schedule is easy for any investor, whether they’re just starting out or played the game for a while. Companies like Deppro exist to help people at any stage of their investment game. They’ll explain how the report works, how items are categorised, and what to do after the clients get the depreciation schedule in their hands. This makes life easier, especially for newcomers, because the experts are taking care of everything.

When you ask the experts for help with depreciation for investment property, you’re also getting an education. Deppro guides their clients through the process of ordering the report and how to use it to maximise deductions. You’ll also learn what a quantity surveyor does, and what items will fall under ‘capital works’ if you ever renovate your property.

When you get expert help for depreciation on investment property you’re making less work for yourself. You get a depreciation schedule that lasts for decades and saves you worrying about accurate numbers. The report, and the expert help that comes with it, is accessible to anyone at any stage of building a portfolio. You’ll also learn a few things along the way, like how to use the report for taxes, and whether you can claim the new carpet for the office as a deductible expense (yes, you can).

How to get on top of property depreciation

Property depreciation is a crucial part of managing your taxes and rental property. If you don’t do it, you’re missing out on cash – lots of it. So how does one get on top of their tax depreciation?

 

First thing’s first: get an expert. Companies like Deppro prepare depreciation reports/schedules that are ATO compliant. Their staff evaluate items for their lifetime value and prepare the report, detailing how they will decrease in value over time. Things in and around the home fall into two categories: plant and equipment, or capital works

 

Second, get the expert to come as soon as you settle with the real estate agent. Quantity surveyors work best when they see the items in the condition you bought them. If the previous owner has done renovations, you can claim deductions on their work! The ATO will only accept a property depreciation report created by a quantity surveyor, not an accountant. This is because they’re the most qualified to do it. You wouldn’t expect someone who estimates material costs for a living to write your tax return.

 

That said, the third step is to get your accountant on your side. They help you with your tax return every year, making sure you’re not missing anything you’re eligible to claim. The accountant will treat the property and depreciable items as another asset to claim. They’ll need the property depreciation schedule to properly write out the returns over the years.

 

Another helpful way to get on top of property depreciation is to make  sure you’re buying a property that will pay for itself over the years. A house or apartment that’s recently renovated and meets the criteria to generate high rental income is ideal.

 

Property depreciation is difficult to wrap your head around. To get on top of it, it’s absolutely necessary to call in experts like Deppro not long after your settlement. When you’ve got the depreciation schedule in hand, you’re set for life, or at least the next forty years.